U.S. stocks take a wild ride as Dow plunges 350 points before recovering

U.S. stocks take a wild ride as Dow plunges 350 points before recovering
Flags fly at the New York Stock Exchange on Wall Street. (Mark Lennihan / Associated Press)

Wall Street took investors on a turbulent ride Friday as stock indexes veered into a steep slide that knocked 350 points off the Dow Jones industrial average before the market eventually clawed back most of its losses.

The market stumbled after former national security advisor Michael Flynn pleaded guilty to lying to the FBI and said he would cooperate with the investigation into Russian meddling in the U.S. presidential election.


That raised concerns among traders that the White House's legislative agenda, including a tax overhaul under debate in Congress, could be at risk. Those jitters were allayed somewhat by early afternoon, when Senate Republicans signaled they have enough votes to push forward on the tax legislation.

The Standard & Poor's 500 index fell 5.36 points, or 0.2%, to 2,642.22. The index still ended the day with its best week since mid-September. The Dow Jones industrial average slid 40.76 points, or 0.2%, to 24,231.59. The Nasdaq composite lost 26.39 points, or 0.4%, to 6,847.59. The Russell 2000 index of smaller-company stocks gave up 7.12 points, or 0.5%, to 1,537.02.

The news of Flynn's plea came as investors were keeping an eye on Washington, where Republicans moved to make major changes to their proposed tax overhaul package.

"The tax bill, in our mind, is going through," said Phil Orlando, chief equity strategist at Federated Investors. "This Flynn situation, the Mueller investigation, does not derail the tax reform, which we think is essentially at hand."

The technology sector, an investor favorite since the beginning of the year, accounted for some of the biggest losses Friday. Qualcomm declined 1.3% after Bloomberg News reported that Broadcom, a rival chipmaker, won't make a new offer for the company until next year. Qualcomm shed 85 cents to $65.49. Broadcom lost $6.38, or 2.3%, to $271.56.

Several airlines traded lower as industrial stocks declined. American Airlines Group fell $1.49, or 3%, to $49, while Alaska Air Group gave up $2.26, or 3.3%, to $66.91.

A pickup in crude oil prices helped lift energy stocks, giving the sector the biggest gain in the S&P 500. Oil and gas producer Apache Corp. also posted the big gain among S&P 500 companies, climbing $2.39, or 5.7%, to $44.22. Benchmark U.S. crude New York rose 96 cents, or 1.7%, to settle at $58.36 a barrel. Brent, the international standard, added $1.10, or 1.8%, to close at $63.73 a barrel.

Bond prices rose. The yield on the 10-year Treasury fell to 2.36% from 2.41% late Thursday.

The dollar fell to 112.05 yen from 112.53 yen on Thursday. The euro weakened to $1.1893 from $1.1896.

Gold added $5.60, or 0.4%, to $1,278.80 an ounce. Silver dropped 9 cents to $16.30 an ounce. Copper rose 3 cents to $3.07 a pound.


2:35 p.m.: This article was updated with the market's close.

This article was originally published at 8 a.m.